Sky profits up as customer growth is highest in a decade

A million new customers joined Sky over the past twelve months(Reuters)

Sky's profit edged up by 6% to £1.2bn in its 2014-15 financial year after it saw the highest organic customer growth since 2004.

The pay-television giant reported that sales jumped 5% to £11.3bn, in line with expectations, as almost a million new customers joined Sky since 30 June 2014.

"The past 12 months have been an outstanding period of growth for Sky," the company's chief executive Jeremy Darroch said.

"It's clear that the steps we have taken to broaden out our business are paying off. By distributing our content over multiple platforms and launching new products and services, we are now able to offer something for every household."

The company published its first full year results since the £7bn (€9.9bn, $10.9bn) acquisition of sister companies Sky Italia and Sky Deutschland in November 2014 which has helped increase the television giant's customer numbers by 45%.

Darroch said: "We've successfully completed a deal that has transformed the size and scale of opportunity for the business whilst delivering an excellent financial and operational performance as more customers chose Sky and took more of our products."

The company, which includes BSkyB and owns Sky News, raised its dividend by 3% although adjusted earnings per share were down by 2% to 56. This did not stop Sky's share price rising more than 4% in pre-market trading.

Steve Liechti, analyst at Investec, said that the results from the merger might seem great for Sky in terms of sales, but the high costs might be a long term problem. He said: "[2016 full year] estimates look ok, but [2017 full year] consensus forecasts may reduce slightly given Germany costs."

Liechti also warned that the dangers of the competitive UK market are far from gone. "Reduce [rating of shares] retained given increasing competitive pressures in a consolidating European market with cost pressures a drag, though potential Fox bid and positive Ofcom ruling vs BT Openreach are positive catalysts."

Sky also also underlined the focus on new businesses, with sales generated by its new divisions such as Sky Store, Sky Vision and AdSmart more than doubling in the financial year.